BITS Pilani

presentation
Parag Rastogi
BITS Pilani Faculty Management Department
Pilani Campus
 BITS Pilani
Pilani Campus

MBA ZG541, Consultancy Practice

Lecture No. 9 & 10
Strengths : Flexible org structure  Quick decision making/Inhouse research  Tailored
client service/Senior-level resource engagement  Agile Consulting Model 
Learning opportunities for consultants  Empowered Employees  High employee
morale and retention  Sustainable Competitive Advantage

Weaknesses : Limited resources (people/marketing/tech/BoK)  Lack of expertise in the

domain  Scaling issue  Limited brand recognition  Client trust issues

Opportunities : Uncertain business environment  Demand for agile consulting services

 Personalised service by Intrim  Higher customer satisfaction  Stronger Intrim
Positioning  Strong referrals

Threats : Strong Brands as Competitors  Intrim can be overshadowed + Economic

downturns  Need to sustain to build a brand  Sustain the firm (manage cash
flows)

They leveraged “tailored client services” and “inhouse research” wrt McKinsey for this
project.

BITS Pilani, Pilani Campus

Intrim’s Value Proposition  Delivery of customized solutions

Differentiation  Consulting solutions that support customers’ processes

rather than selling consulting solutions with own processes. (McKinsey’s
best practices based model)

+ Adaptability in stakeholder management  Responsiveness based on real-

time feedback from Steelco

+ Long-term partnership with stakeholder alignment  Outcome-based

solutions

By focusing on senior resources engagement, superior stakeholder

management, in-house first hand market research and long-term
commitment, Intrim can demonstrate that their consulting services lead to
sustainable business solutions, thus justifying their rates through proven
value rather than competing solely on price.
BITS Pilani, Pilani Campus
Value-Based Pricing: Intrim’s Consulting solution  Steelco financial benefits  Steelco sees value in the
services
Tiered Pricing: Intrim proposes different service levels with different pricing levels  Steelco chooses the
package
Outcome-Based Fees: Intrim’s Consulting Solution  Steelco financial benefits  Intrim’s fees is contingent
on financial benefits
Evaluation of pricing models :
Value-based pricing model : Prices based on the perceived value delivered to the client rather than strictly on
costs or competitors' prices. It emphasizes understanding client needs and delivering tailored solutions
that justify higher fees.
Tiered-based model : Differential pricing is based on level of engagement or total business volume. As the
scope is already defined, this model will not work.
Outcome-based fees model : High risk for Intrim and the operational execution will take long. This model will
not work.
Given the SWOT and USP of Intrim and the evaluation above of the pricing models, the value-based pricing
model is what Intrim should take forward.
Pricing can indeed be seen as an investment in client relationships, particularly in the context of relationship-
based pricing models. Intrim has invested in the diagnostic study – this can be construed as relationship-
based pricing investment from their side.
Relationship-based pricing can be seen as the pricing done keeping the customer life time value in terms of
potential revenues during the stretched out engagement over a period of time.
Intrim can start with value-based pricing and then they can then switch to tiered/outcome/retainership pricing
models over a period of time with Steelco.
BITS Pilani, Pilani Campus
+ve Impact : Winning Steelco  Proven credible alternative to
larger/expensive firms  Prove customised solution model 
Referrals/Case Studies  Attract more clients  Portfolio of clients
 Higher growth trajectory Enhance Intrim’s brand reputation

-ve Impact : Steelco as a large client  High stake and dependency on

a (probable) single client  Neglect of business opportunities &
Neglect of other clients (if applicable)  Lower business outcome &
Poor satisfaction for other clients  Lack of business pipeline &
Poor client retention  Lower growth trajectory  Negative impact
on Intrim’s brand reputation

BITS Pilani, Pilani Campus

Objectives

Provide an overview of the main consultancy techniques

and frameworks.

Explain how consultancies develop their own tools and

products.

Discuss the limitations of the tools of consultancy.

BITS Pilani, Pilani Campus

Why frameworks and models?

The experimental scientific method involves

– Closed systems
– Isolated variables
– Predictability
Organisations as open systems : dynamic entities
that interact with external environment.
Feedback.
Consultants as artists not scientists
– Solving business problems
– Working with clients
– Re-interpreting rules and tools
– Importance of reflexivity, innovation and creativity

BITS Pilani, Pilani Campus

Open Vs Closed System

Element Open System Closed System

Interaction with Interacts extensively with Isolated from external
Environment the environment influences
Relies on external feedback Internal focus, minimal
Feedback
for adaptation feedback from outside
Highly adaptable and Resistant to change, seeks
Adaptability
responsive to change stability
Both internal and external Primarily internal (process
Focus
(holistic view) efficiency)
Constantly learns and
Limited innovation, internal
Innovation and Learning innovates based on
focus
external factors
Attempts to maintain
Relies on adapting to control, but long-term
Survival
external pressures survival is challenging
without adaptation

BITS Pilani, Pilani Campus

Open Systems are Complex..
With several players

BITS Pilani, Pilani Campus

Frameworks for Business
Analysis

BITS Pilani, Pilani Campus

Iceberg Model / Systems
Thinking
• Peter Senge often used the Iceberg Model to illustrate
systems thinking.
• The visible part of the iceberg represents events or
symptoms (what’s happening), but below the surface lie
patterns, underlying structures, and mental models that
drive those events.
• To address issues effectively, organizations must look
beneath the surface to understand the deeper systems
at play.

BITS Pilani, Pilani Campus

BITS Pilani, Pilani Campus
Systems Thinking Approach

• Organizations are seen as dynamic, interconnected

systems where changes in one area can influence others
in unexpected ways. By adopting this mindset,
organizations can:
• Avoid unintended consequences of decisions.
• Understand the long-term impact of their actions.
• Better navigate complex challenges by recognizing
interdependencies.

BITS Pilani, Pilani Campus

BITS Pilani, Pilani Campus
RIVA
• Principles of efficiency, specialization, and standardized work processes
• Role, Interaction, View, and Activity is used to structure and model
processes, particularly in complex organizations or systems.
• Role: Defines the roles involved in a system or process. A role can be a
person, team, department, or even a system performing a specific function
within the business.
• Interaction: This refers to the communication and collaboration between
different roles. It focuses on how roles exchange information and coordinate
actions to complete tasks or achieve goals.
• View: Describes the perspective of each role in relation to the system. Each
role has its own view or understanding of the system based on its
responsibilities and activities. This helps in capturing different perspectives
within the organization.
• Activity: Outlines the specific tasks or actions each role performs within the
system or process. Activities are the operational aspects that drive the
system forward.

BITS Pilani, Pilani Campus

Application of RIVA
• Business Process Design: RIVA helps map out roles and their interactions in a
business process, making it easier to understand workflow and responsibilities within
the organization.
• System Modeling: In IT and systems design, it’s used to design and refine how
different parts of a system (such as users and software components) interact.
• Requirements Engineering: The method is employed to identify and document the
functional requirements of a system by clearly mapping out the interactions between
roles and the system.
Benefits of RIVA
• Clarity: It breaks down complex systems into understandable parts by focusing on
roles and interactions.
• Communication: It facilitates clear communication between stakeholders by
capturing their respective views and responsibilities.
• Process Optimization: By identifying and understanding roles and interactions,
organizations can optimize processes, reduce redundancies, and improve efficiency.

BITS Pilani, Pilani Campus

Bank Loans

Roles: Define key players such as Loan Officer, Credit

Analyst, Compliance Officer, Customer, Loan
Committee, and System.
Interactions: Map communication points between roles
(e.g., Loan Officer and Customer, Credit Analyst and
System).
View: Develop each role’s perspective on the process,
focusing on their respective tasks and responsibilities.
Activities: Define specific tasks each role performs, such
as document collection, risk analysis, and regulatory
checks.

BITS Pilani, Pilani Campus

How RIVA Helps?

Improved Efficiency: By automating document collection

and regulatory checks, the process becomes faster and
reduces manual errors.
Reduced Risk: Automated compliance checks reduce the
likelihood of legal non-compliance.
Better Use of Resources: By automating approval for
lower-risk loans, the loan committee can focus on high-
value or more complex decisions.

BITS Pilani, Pilani Campus

Hospital

A hospital is a complex system where multiple roles

(doctors, nurses, administrators, patients) interact within
various processes (patient admission, treatment, billing).
Using the RIVA method, each role is mapped out with its
respective activities (e.g., a doctor diagnosing a patient,
a nurse administering medication), and their interactions
are analyzed to improve process flows, reduce delays,
and improve patient care.

BITS Pilani, Pilani Campus

RIVA & Systems Thinking Can
Complement Each Other
Systems Thinking helps us understand the broad patterns and behaviors that
emerge from these interactions (e.g., patient flow bottlenecks).
Systems Thinking would look at the hospital as a whole, understanding how
patient care, administrative processes, and resource allocation (like doctors,
nurses, equipment) are interconnected. It would focus on feedback loops
such as how delays in admitting patients lead to overcrowded emergency
rooms, impacting care quality and staff workload.

RIVA provides the detailed framework to see how individual roles and their
activities contribute to these larger system patterns.
RIVA would break down the roles within this system (doctors, nurses,
administrative staff, patients, medical technicians) and map their
interactions. It would highlight how the activities of a nurse (e.g., patient
check-ups) depend on the information provided by the doctor (e.g.,
diagnosis), and how delays in these activities affect patient discharge times.

BITS Pilani, Pilani Campus

Soft Systems Methodology

BITS Pilani, Pilani Campus

• SSM, developed by Peter Checkland, is a qualitative approach to problem-solving
that emphasizes understanding complex, “messy” situations. (As a contra to hard
approach like Operations Management)
• Tool for investigating system requirements - not a system design tool.
• It helps determine what operations a system should perform and why. So it focuses
on the perceptions and worldviews of different stakeholders and their impact on
systems.
• SSM is directly aligned with systems thinking, especially in complex, ambiguous
situations where different stakeholders have different interpretations of the problem.
Like RIVA, it focuses on roles and interactions but places more emphasis on
subjective perspectives and mental models.
• SSM is often used in public policy and development projects where multiple
stakeholders (with conflicting interests) need to be engaged in a dialogue to
address complex issues such as poverty or healthcare reform.
• SSM recognizes roles such as the client, problem owner, and would-be problem
solver. Actors are the employees or teams that work on integrating transformation
or modification processes.

BITS Pilani, Pilani Campus

CATWOE analysis to structure
the Root Definitions
Customers: Who benefits from the system?
Actors: Who carries out the activities in the system?
Transformation process: What is being transformed by the
system?
Weltanschauung (Worldview): What is the broader view or
rationale for the system’s existence?
Owners: Who has control over the system?
Environmental constraints: What external factors influence
or limit the system?

BITS Pilani, Pilani Campus

Hospital System
Unstructured Problem Situation: Hospital management knows there are long wait times and staff
shortages but doesn't have a clear understanding of why.

Express the Situation: A “Rich Picture” is created, showing the relationships between doctors, nurses,
administrators, and patients, as well as issues like communication breakdowns, delays, and
understaffed departments.

Formulate Root Definitions: Using CATWOE, the team defines a system to manage patient intake, where
patients are quickly assessed and assigned to doctors based on urgency and resource availability.

Build Conceptual Models: The conceptual model describes how patient data should flow through intake,
and doctor assignment. It maps out key steps in the process.

Compare with the Real World: The team compares this ideal model with the actual system and finds
gaps—e.g., delays in updating patient information are causing bottlenecks.

Define Changes: The hospital could introduce a new electronic system to streamline patient intake,
ensuring timely updates and better coordination between departments.

Take Action: The hospital implements the new system, trains staff, and continuously monitors its
performance, ensuring adjustments are made as required.

BITS Pilani, Pilani Campus

Decision Tool – Pareto
Analysis
What is Pareto Analysis?
The 80/20 Rule: Pareto Analysis is based on the Pareto Principle, also
known as the 80/20 rule, which states that roughly 80% of effects
come from 20% of causes.
Origins: Named after Vilfredo Pareto, an Italian economist who
observed that 80% of Italy’s wealth was owned by 20% of the
population.
Key Principles:
Identify Vital Few: Focus on the small number of factors (20%) that
have the most significant impact (80%) on the outcome.
Data-Driven Decision-Making: Pareto analysis relies on quantitative
data to identify priority areas for improvement.
Prioritization: It helps in prioritizing tasks, problems, or areas where
the most significant improvements can be achieved with the least
effort.
BITS Pilani, Pilani Campus
80% information 20% information

Information Cost

BITS Pilani, Pilani Campus

Consultants often use Pareto Analysis in the following
areas:
Problem-solving: To identify key factors that are
responsible for most problems.
Process Improvement: In lean or Six Sigma projects to
highlight inefficiencies.
Customer Relationship Management (CRM): Focusing
on key clients that drive the most revenue.
Cost Reduction: Identifying areas where 20% of the cost
is causing 80% of financial inefficiencies.

BITS Pilani, Pilani Campus

Steps to Conduct Pareto
Analysis
Identify and List Problems/Opportunities:
– Collect data related to the problem or process (e.g., customer complaints, defects, etc.).
Measure the Frequency or Impact:
– Measure how often each problem occurs or its financial impact.
Sort the Problems:
– Rank the problems or issues from most to least significant in terms of frequency or impact.
Create a Pareto Chart:
– Plot the data using a bar chart with the frequency or impact on the Y-axis and problems on
the X-axis.
– Cumulative percentages are also plotted to show how quickly the 80% threshold is reached.
Interpret the Results:
– Focus on addressing the small number of issues responsible for the largest effects.

BITS Pilani, Pilani Campus

Pareto Analysis

Scenario: Walmart used Pareto analysis to identify which products

were responsible for most of their returns.
Result: By focusing on the 20% of items causing the majority of
returns, they adjusted their return policies, improved packaging, and
worked with suppliers to fix product defects. This saved Walmart
millions in return-related costs.
Pareto Analysis in Software Development (Microsoft)
Scenario: Microsoft’s software development team used Pareto
Analysis to identify bugs in their code.
Result: 80% of the bugs were found to originate from just 20% of the
code. By focusing on this critical portion of the code, they were able
to reduce system failures and improve software reliability.

BITS Pilani, Pilani Campus

BITS Pilani, Pilani Campus
4 C’s Strategic Model

Customer: Conduct customer segmentation to understand various needs and tailor

products or services accordingly.
Competition: Conduct competitive benchmarking to find gaps or areas where your
company can outperform.
Cost: Optimize internal processes to reduce costs while offering competitive pricing and
value to customers.
Company: Align internal strengths and resources (like R&D, operations, or brand
reputation) with market opportunities.

BITS Pilani, Pilani Campus

Porter Model

BITS Pilani, Pilani Campus

Value Chain Analysis

BITS Pilani, Pilani Campus

Value Chain Analysis

BITS Pilani, Pilani Campus

McKinsey 7S Framework

BITS Pilani, Pilani Campus

Improving Operations through
Modeling

Financial models

Process models

System modelling

IT modelling

BITS Pilani, Pilani Campus

Improving Operations

Business process re-engineering

Total quality management

The balanced score card

The 4 Ps
– Product
– Price
– Promotion
– Place

BITS Pilani, Pilani Campus

Balanced Scorecard Framework

BITS Pilani, Pilani Campus

Maximising Profits

Profit = Revenues – Costs

Revenues – Costs = [(price – variable cost) × quantity] –

Fixed Costs

Costs

Revenues

BITS Pilani, Pilani Campus

BITS Pilani, Pilani Campus
Financial Tools

Cash flow

New present value / cost of capital

Return on investment

BITS Pilani, Pilani Campus

Exploitation Vs Exploration

BITS Pilani, Pilani Campus